consumer durable 060109
TRANSCRIPT
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C O N S U M E R D U R A B L E SDecember 2008
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The Indian Consumer Durables Industry
can be segmented into three key groups
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Consumer Durables
White Goods
Rerigerators
Washing Machines
Air Conditioners
Speakers and Audio Equipments
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The Indian Consumer Durables Industry
can be segmented into three key groups
Consumer Durables
Kitchen Appliances/Brown Goods
Mixers
Grinders
Microwave Ovens
Iron
Electric Fans
Cooking Range
Chimneys
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The Indian Consumer Durables Industry
can be segmented into three key groups
Consumer Durables
Consumer Electronics
Mobile Phones
Televisions
MP3 Players
DVD Players
VCD Players
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Several key trends are driving growth in the sector
Income growth and availability o fnancing
Disposable income levels are rising and consumer
fnancing has become easier
Increased aordability o products
Advanced technology and increasing competition
are narrowing the price gap and the once expensiveappliances are becoming cheaper
Increasing share o organised retail
Urban and rural market are growing at the annual
rates o seven per cent to 10 per cent and 25 per cent
respectively with organised retail expected to garner
about 15 per cent share by 2015 rom the current
5 per cent
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Several key trends are driving growth in the sector
Entry o heavyweight retail players is
increasing competition
Competitive evolution o organised retail due to the
entry o heavyweight players like Croma, E Zone and
Reliance Digital is stimulating the demand through
exposure
to experiences
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Making Consumer Durable one o the astest growing industries in India
Industry sales was estimated to be about
US$ .1 billion in value in 00-08, a growth
o more than 1 per cent over 00-0
Key Consumer Durables - Share by Volume (%)
n Colour TVs n Rerigerators
n Air Conditionersn Washing M/Cs
n
Others
30%
19%
12%
5%
34%
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Consumer Durables is one o the astest growing industries in India
A strong growth is expected across
all key segments
Projected Growth Rates
Colour TVs 25-30%
Rerigerators 18-22%
Washing Machines 15-20%
Air Conditioners 32-35%
Others (including VCDs
and DVDs)
35-40%
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Overall, the sector is a dynamic one, with signifcant growth opportunities
Threat o New Entrants
Most current players are global players
New entrants will need to invest in Brand,
Technology and Distribution
Supplier Power
Indigenous supply base limited - most raw
materials are imported
Competitive Rivalry
Number o well established players, with
new players entering
Good technological capability
Many untapped potential markets
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HIGH
MEDIUM
LOW
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Overall, the sector is a dynamic one, with signifcant growth opportunities
Customer Power
Multitude o brands across price points -
wide variety o choice or customers
Threat o Substitutes
Unbranded products and cheaper imports
could enter the market
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HIGH
MEDIUM
LOW
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Some o the attractive areas or investment include
High End Colour TVs
Plasma display panels and liquid crystal display TVs
have registered an average growth o more than
100 per cent in 2007-08 and the trend is expected
to continue
Split Air-conditioners
Split ACs have been growing at a much aster rate
than Window ACs - Growth o 97 per cent in
2006-07 as compared to a 32 per cent growth
o Window ACs
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Some o the attractive areas or investment include
Mobile Phones
The mobile phone market grew at 29 per cent
in 2007-08, over the previous year. The market is
expected to grow at a CAGR o about 28.3 per cent
rom 2006 to 2011
Distribution and Retail
With the rural and semi-urban markets creating
opportunity and an almost sedentary urban market,
the need to have a strong distribution network is
crucial or the companies to remain price competitive
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Attractive States or Investment
Key parameters used or determining
attractiveness o states:
Incentives or manuacturing sector
Consolidation o actors, including skilled workorce
Proximity to demand centres
Proximity to ports or raw material imports
Maharashtra, Uttar Pradesh and Tamil Nadu
are attractive locations or investment in
manuacturing consumer durables.
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A successul MNC in India sample case
Situation
Mobile phone landscape in 1995 was one
open business opportunity or all the players
to capture and succeed
Nokias Key Strategy
Being ocused and ahead o the curve
Invested in each vertical o the handset ecosystem
manuacturing, distribution and design R&D
Parent company is always ready to invest
more in India
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A successul MNC in India sample case
Key Success Factors
Strong Distribution Network
India has some 95,000 outlets that sell mobile phones
with a conservative estimate o 50,000 o them selling
only Nokia
Manuacturing Edge
Nokia has several R&D centres and labs in India
including a $150 million handset manuacturing acility
in Chennai set up in 2005
The Mother Brand
Whether it is N series or the E series, the
key ocus is the Mother Brand Nokia
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A successul MNC in India sample case
Key Success Factors
Local Products
Custom-made mobiles or Indian conditions: Nokia
1100, having a torch built into a mobile phone helps
in a country with requent power cuts - distinct and
tangible beneft
Such examples highlight the key success actors
to succeed in the Indian market
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Success in the industry would depend on addressing
key actors
Market Positioning and Branding
Addressing key customer requirements that act
as demand drivers by proactive marketing and
establishing strong brand association
Product Technology
Providing technologies that beneft the customer
through - low power consumption, low service
requirement, low cost o operation, etc.
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Success in the industry would depend on addressing
key actors
Distribution and Service Network
From saturated urban regions to low penetration
rural areas and tier II/III towns, distribution network
and brand recognition will continue to play more
signifcant roles
Attractive Locations
With raw materials orming a signifcant chunk o
costs, production acilities located near ports
to import cheaper raw materials could provide
an advantage
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Profles o Key Indian Consumer Durables Players
MIRC Electronics
Commands strong brand equity among consumers,
largely owing to the success o its Onida brand
Finest design has made the company a leading player
in the electronics and entertainment business today
Planning to set up a manuacturing plant in
Uttaranchal or manuacturing various consumer
electronic products
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Profles o Key Indian Consumer Durables Players
Voltas
Oers engineering solutions in areas such as heating,
ventilation and air conditioning, rerigeration,
electro-mechanical projects, textile machinery,
machine tools, mining and construction equipment,
materials handling, water management, building
management systems, indoor air quality and chemicals
Operations have been organiaed into our
independent business specifc clusters: air conditioning
and rerigeration, unitary products, engineering
products and international operations
Tied up with RBS Home Appliances Ltd or the use o
640 service centres that Voltas has across the countryor ater sales services
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Profles o Key Indian Consumer Durables Players
Videocon
Market leader o consumer electronics and home
appliances in India - manuactures home appliances
such as rerigerators, microwave ovens, compressors,
ACs and washing machines
Planning to acquire Daewoos consumer electronicbusinesses worldwide to bring LCD TVs, Plasma TVs
and components into its old and also helps
in having a consuming partner or the recently
acquired Thomsons picture tube business
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Profles o Key Indian Consumer Durables Players
Bajaj Electricals
Engaged in marketing o various consumer household
and industrial goods
Manuactures erection and commissioning o
transmission line towers, telecom towers, mobile
telecom towers and wind energy towers
Planning to outsource manuacturing o gas appliances
and water dispensers, which will be marketed under
its own brand
Planning to introduce inverters and two new lines
o business
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